Clause 10 - Brandsharing

Tobacco Advertising and Promotion Bill – in a Public Bill Committee at 6:15 pm on 6 February 2001.

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Photo of Caroline Spelman Caroline Spelman Shadow Spokesperson (Health) 6:15, 6 February 2001

I beg to move amendment No. 14, in page 4, line 44, leave out from `name' to `which' in line 46 and insert

`or emblem which is identical in appearance to a name or emblem'.

Photo of Humfrey Malins Humfrey Malins Conservative, Woking

With this we may discuss amendment No. 15, in page 5, line 1, leave out from `name' to `which' in line 4 and insert

`or emblem which is identical in appearance to a name or emblem'.

Photo of Caroline Spelman Caroline Spelman Shadow Spokesperson (Health)

We want to make progress, but brand sharing is important and we must be careful to give it the right amount of time in debate. I heard what the Minister said about continuing tonight, but that places me in a slightly difficult position, as I intended to attend a cross-party event at 7 pm involving the Minister for Women and the respective parties' spokesmen for women. [Interruption.]

Photo of Humfrey Malins Humfrey Malins Conservative, Woking

Order. The Committee is becoming a little noisy.

Photo of Caroline Spelman Caroline Spelman Shadow Spokesperson (Health)

Thank you, Mr. Malins.

Under the Bill, tobacco companies that have diversified into other areas will be penalised for using their brand name on products completely unrelated to their tobacco products, even if the logo is completely different from that used on the tobacco products. It is beneficial to all employed in the tobacco industry if those companies diversify to protect jobs.

It is difficult to understand why the Government object so strongly to tobacco companies diversifying into other areas. I would far rather that the companies produced another product, such as petrol or something that posed a lesser risk to public health. To shut the companies down completely with no alternative outlet would be a hard measure to impose on them. We need to find ways of encouraging the firms to move into other areas if possible, and not to penalise them for doing so.

However, certain companies will be caught by the brand sharing measure and innocent parties will be bound by the constraints of clause 10. I provided a good example on Second Reading—the Minister is familiar with it, but I shall repeat it to the Committee to demonstrate the problems that might arise—of a company that markets clothing and luggage under the Camel brand. It is separate from any tobacco manufacturing company and produces goods that could not possibly be described as tobacco-based products or accessories, such as boots, shoes and suitcases.

Originally, the company adopted the Camel logo that is traditionally associated with that brand of cigarettes. It is an international company that is based in Germany and the United Kingdom. In order to comply with the relevant European directive, it completely changed its logo and renamed its products Camel Active. The style of writing of the Camel name was completely different from the logo on a packet of cigarettes and the company continued to sell entirely tobacco-free products. The company is worried that it might still be caught by the Bill, so it has asked me to bring its concern to the Committee's attention. It might be an innocent victim, subjected to the clause's brand sharing restrictions.

It is interesting to reflect on the advice that was given on brand sharing when the European directive was annulled. I have a copy of a letter from the company— Worldwide Brands—which has been in close contact with the Advocate General who was instrumental in the decision to annul the European directive. As we all know, it was decided that the measure had been introduced on the wrong legislative basis. On brand sharing, the Advocate General held that

``the Directive's provisions on brand diversification advertising in no way contribute to the removal of trade barriers affecting brand diversification products.''

He was not minded to restrict brand diversification on internal market grounds. He concluded that

``since the Directive would not be an effective means of reaching its stated Internal Market goals, it was not proportionate to these goals and thus infringed the proportionality principle, the EC Treaty provisions on the free movement of goods and the basic rights to property and to pursue an economic activity.''

Brand sharing was not to be treated as harshly under the proposed European directive as it is under the Bill. Furthermore, the Advocate General held that

``the restrictions on brand diversification advertising violated the right to freedom of speech, as guaranteed by Article 10 of the European Convention on Human Rights... the Community legislator had not presented any evidence to suggest a link between brand diversification advertising and overall tobacco consumption... there were therefore no reasonable grounds to justify the restrictions on freedom of speech provided for in the Directive.

That interesting information about the European directive is relevant to our debate on brand sharing. Clause 10 does not provide an adequate solution for companies such as Worldwide Brands, which through its best endeavours has tried to break free of the accusation that when people buy boots and shoes with the Camel Active logo, that somehow fuels tobacco consumption and increases smoking prevalence.

Photo of Mr Ernie Ross Mr Ernie Ross Labour, Dundee West 6:45, 6 February 2001

I have listened to the h Lady with interest. Does she know why the company originally chose the name Camel? If it chose the name because it is that of a well-known cigarette brand—even though it was used to market another product—and had enjoyed many years of sales based on that link, however tenuous, the company can hardly expect us not to say that it has had its good years but now we want to get rid of tobacco advertising and association with tobacco products.

Photo of Caroline Spelman Caroline Spelman Shadow Spokesperson (Health)

I do not know the precise reasons for the company's choice of the Camel logo. We have to legislate for here and now and it is unreasonable to visit the sins of the father on the grandchild—especially when the company has made such a great effort to move away from an emblem that mirrors that on the cigarette packet. The present logo in no way resembles the cigarette brand logo and we should recognise the company's endeavours to tackle genuine concerns that young people might buy its clothing because they have in the back of their minds the connection with an attractive cigarette brand.

Photo of Mr Ernie Ross Mr Ernie Ross Labour, Dundee West

I drink Guinness. The company that produces and promotes Guinness is called Diageo. There could not be two more dissimilar words; indeed, there was a big debate about what Diageo meant. However, that does not stop me or other people drinking Guinness. The company does not have much of a leg to stand on.

Photo of Caroline Spelman Caroline Spelman Shadow Spokesperson (Health)

I suspect that the basic principle to which the hon. Gentleman refers comes under competition law—which is outside my sphere of competence. The question of whether start-up companies with logos similar to that of the original bearer of a logo can be perceived as having infringed on the market share of the original company is probably more accurately dealt with in the context of competition law.

The amendment deals with the need to recognise the efforts of a company that distances itself from an emblem that clearly and identifiably resembles—or replicates—a cigarette brand logo. The company that we are debating has been in discussion with the Government and was actively encouraged to draft amendments to deal with its dilemma. There are no Government amendments to the clause—although some may be in the pipeline—and we do not seem to be addressing the problem. Does the Minister intend to bring forward proposals to deal with difficulties such as those faced by Worldwide Brands?

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

The clause provides regulation-making powers on brand sharing. We intend to consult on the detail of the regulations because we recognise that complex issues are involved.

As I said on Second Reading, the regulations do not aim to undermine genuine business diversification. If tobacco companies wish to diversify into clothing or any other trade and if they adopt completely separate branding and their intention is not to promote a tobacco product, such diversification would be welcomed, but we do not want to permit tobacco companies to move into alternative products and alternative uses of their brand that clearly aim to promote tobacco products.

A couple of documents that were extracted from the tobacco companies by the Health Committee show how the tobacco industry tries to get around rules that are designed to control it. The first said:

``If we feel we can legally say the words a `Special F1'''— as in special filter—

``we can get a little close to more overtly implying the brand on the car''.

The second document said:

``We wonder if you could slightly corrupt the Jordan logo to include a large ampersand''— as in Benson & Hedges—

``. . . the ampersand is not actually part of your logo though if it were to appear I believe people would recognise it as being so.''

Those two examples demonstrate how it would not be acceptable under the aims of the Bill to allow companies to use brands or logos that are not identical to the tobacco product brand, but are similar and have the same effect of promoting a tobacco product or brand. The amendment would allow Marlboro to promote Marlborough Classic Clothing where it simply adds the letters ``ugh'' to the name. The brand is still recognisably the same. Alternatively, it would allow a tobacco company to acquire Tommy Hilfiger clothing and then to introduce a Tommy H brand of cigarettes, which would clearly draw on the power of the Tommy Hilfiger brand to promote cigarettes.

We cannot therefore accept an amendment that would narrow the clause to simply refer to branding that is identical to that used by tobacco companies. There is clearly a distinction between brands that are separate and are not used to promote a tobacco product. We have no intention of including separate and distinct branding in the regulations. That is why we will consult in detail. We will allow companies to make representations to ensure that legitimate business diversification is encouraged under the Bill, but we cannot accept the word ``identical''.

Photo of Peter Luff Peter Luff Opposition Whip (Commons)

On consultation, I understand the Minister's objectives, which are honourable and noble in the context of the Bill. However, she is exploring a difficult area in which many value judgments will be required. I once advised the Alfred Dunhill luxury goods company, which did not deal with the tobacco end of the business. There is huge room for debate about where the promotion lies. I hope that the consultation will be genuine, thorough and unrushed. It is important for genuine businesses such as the Alfred Dunhill luxury goods company not to be caught up by over-rushed regulations.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

We certainly recognise the need for proper and thorough consultation. We are also keen to consult with the European Commission on its proposals. We recognise that this is a complex area, and we are keen to have a thorough and effective consultation process, but equally we do not want to allow a massive loophole into the Bill that would permit all sorts of products that are just slightly different from the original brand to be used to promote tobacco products.

Photo of Caroline Spelman Caroline Spelman Shadow Spokesperson (Health)

I cannot help feeling that we are putting the cart before the horse here. Surely this massive consultation exercise should have taken place before the Bill reached Committee. I feel uneasy about letting through the clause without registering my objections. It is unnecessarily restrictive. We have been promised a big consultation exercise. However, that company has made an effort—no doubt it spent a great deal of money on completely changing its logo—that could prove to be of no avail.

I would be dissatisfied to let things stand. I have no desire to create a massive loophole that will allow through products that will increase smoking prevalence, but the fact that tobacco companies diversify into other markets, such as clothing, does not automatically lead to people smoking more cigarettes. There is not a tight correlation between the two. I would certainly like to encourage tobacco companies to diversify. I would far rather they produced something else, rather than tobacco that is associated with public health risks.

The Minister has put me in a difficult predicament because I will not know the outcome of her big consultation process in time to inform my decision on whether to let this clause through unamended. That decision has to be made now. I need to find some way of signalling to those who will consider the Bill in another place my concerns about this and one or two other clauses.

Photo of Yvette Cooper Yvette Cooper The Parliamentary Under-Secretary of State for Health

I should inform the hon. Lady that Parliament will have the opportunity to discuss the regulations as they will be laid through the affirmative procedure.

Photo of Caroline Spelman Caroline Spelman Shadow Spokesperson (Health)

I accept that we shall have the chance to debate them, but if the Government have anything like their current majority, we will not be able to alter them effectively. My best course of action is to press amendment No. 14 to a Division, to signal my concern about this clause.

Question put, That the amendment be made—

The Committee divided: Ayes 4, Noes 9.

Division number 3 Adults Abused in Childhood — Clause 10 - Brandsharing

Aye: 4 MPs

No: 9 MPs

Aye: A-Z by last name

No: A-Z by last name

Question accordingly negatived.

Question proposed, That the clause stand part of the Bill

Photo of Mr Ian Bruce Mr Ian Bruce Conservative, South Dorset

This will be a 30-second speech. I understand that the Whips want us to finish by 7 o'clock.

We are in great difficulty because we have not seen the regulations, which really should have been produced in draft form for the Committee. Here is a branded packet of cigarettes with the House of Commons logo. We promote tobacco in the House of Commons using our brand. It is so important that we get this right and I want to signal that to allow the provision through without having seen the regulations is a travesty.

Question put and agreed to.

Clause 10 ordered to stand part of the Bill.

Further consideration adjourned.—[Mrs. McGuire.]

Adjourned accordingly at Seven o'clock till Thursday 8 February at Nine o'clock.